To become successful in the market long term, you have to become a student of the market. You have to know yourself, and match your personality with a particular time frame, and strategy. For one, I feel more comfortable holding on to stocks for a short period taking advantage of the many short term momentum bursts that many stocks exhibit.  A typical stock that goes up 100% or more in one year will make a bulk of those gains in a handful of days. The rest of the time it consolidates by either trading sideways or down.

Top 9 stocks ranked by year to date performance

I’m not very comfortable guesstimating what is going to happen six months from now fundamentally, let alone a year from now. I rather focus my attention on finding a bunch of 5-20% winners than finding five 100% winners. As of 9/16/2015 we have 1,311 stocks above $2 that trade on average over 100k shares daily that are up year to date.  Only 66 out 1,311 (5%) stocks are up 100% or more, 785 (60%) are up between 10% and 100%.  The averages state that it is easier to find a handful of 10-20% winners than it is to find 100% winners. And, most 100% plus winners started with an initial 10% move unless it was bought out.  A serious of small winners will allow you to swing for the fences when you find a stock that has a game-changing catalyst that can potentially make a huge move.

“The Russell 3000 index measures the performance of the largest 3000 U.S. companies, 98% of the investable U.S. equity market.  40% of the stocks had a negative return over their lifetime, 20% of stocks lost nearly all of their value, 10% of stocks recorded huge wins over 500%.  80% of the gains are a function of 20% of the stocks. –The Ivy Portfolio   @Zortrades